STMicro targets more than $3 billion in space chip revenue as demand grows

(Reuters) - STMicroelectronics is targeting well above $3 billion in cumulative revenue for its semiconductor space business from 2026 to 2028, it said on Monday, helped by surging demand for chips used in low-Earth orbit satellite networks.

Shares in the Franco-Italian chipmaker rose by as much as 7%, before settling 2.2% higher at 1536 GMT.

"We are just in the early innings of this market," STMicro executive Remi El-Ouazzane told analysts in a conference call.

STMicro hopes its decade-long supply partnership with Starlink in satellites and user terminals will give it a first-mover advantage to keep as much of ⁠its near 90% market share as possible as this market rapidly expands, attracting competitors.

One of Europe's largest chipmakers said China represented a large opportunity in user terminals, but it will miss out on satellite technology because of export controls.

"We are unapologetically European. So we end up being ⁠actually U.S. and China compatible," El-Ouazzane said.

"The China compatibility, though, starts and finishes at user terminal. Because of export control, we cannot have any satellite technology happening in China," he added.

The company ⁠also identified orbital data centres as a possible future market, but said it has not included any related revenue in its current 2026-2028 target.

"My wild guess as to when ⁠we could start to see, a relevant amount of orbital data centres in the sky, I would say three years from now would be maybe an interesting guess," El-Ouazzane told reporters.